For years we have been trying to understand how the EEOC regulates wellness programs. Although we still do not have a complete picture, we are getting closer with the EEOC’s new Notices of Proposed Rulemaking on wellness programs under the Americans with Disabilities Act (“ADA”) and the Genetic Information Nondiscrimination Act (“GINA”). This blog summarizes the status of the ADA wellness program rules and the changes under the recently released proposed ADA wellness program rules.
Title I of the ADA
Title I of the ADA prohibits discrimination against individuals on the basis of disability in regard to employment compensation and other terms, conditions, and privileges of employment, including “fringe benefits available by virtue of employment, whether or not administered by the covered entity.” The ADA also restricts the medical information employers may obtain from employees by generally prohibiting them from making disability-related inquiries or requiring medical examinations. However, the ADA provides an exception to this rule for voluntary employee health programs, which include many workplace wellness programs.
The EEOC’s 2016 Final ADA Wellness Program Regulations
In 2016, the EEOC clarified what it considers “voluntary” for ADA purposes in its final wellness program regulations. The regulations apply to “employee health programs” which the EEOC defines as wellness programs that include disability-related inquiries and medical examinations. Importantly, if a wellness program is not an employee health program because it does not include a disability-related inquiry or medical examination it is not subject to the ADA’s 2016 wellness program regulations. However, such programs still must be available to all employees and must provide reasonable accommodations to employees with disabilities.
As explained in our previous blog “EEOC Final Rules on Wellness Programs and the ADA – Worth the Wait?” the 2016 rules generally provide that the EEOC will consider a wellness program to be voluntary if it:
In addition, the 2016 rules provide that unless it is necessary to administer the wellness program, an employer may only receive medical information collected by the wellness program in the aggregate and the employer may not require the employee to agree to sell, exchange, share, transfer or disclose medical information, or waive any confidentiality protections to participate in the wellness program, or receive an incentive thereunder.
Finally, in regard to incentives, the 2016 rules allowed an employer to offer limited incentives for employees who participate in a wellness program (i.e., an incentive that did not exceed 30% of the total cost of self-only coverage). However, in 2018 the EEOC removed this provision in response to the AARP v. EEOC ruling (see our previous blog here) and that created uncertainty for employers. Although employers were not necessarily prohibited from implementing an incentive up to the 30% threshold, they also could not rely on the EEOC’s safe harbor rules to demonstrate that their wellness program’s financial incentive was voluntary (see our previous blog here).
The EEOC’s 2021 Proposed ADA Wellness Program Regulations
On January 7, 2021, the EEOC released proposed rules that amend the 2016 ADA wellness program rules. Importantly, the 2021 proposed rules have not yet taken effect and may not be finalized as they are currently written. Also, the fact that the 2021 proposed rules have not yet been published in the Federal Register, suggests that they may be subject to a regulatory freeze under the January 20, 2021 Memorandum for the Heads of Executive Departments and Agencies. Therefore, the 2021 proposed rules show insight into the EEOC’s position, but employers cannot yet rely on them. Here are the major takeaways from the proposed rules:
Recently many employers have made, or are considering, wellness program design changes to accommodate their remote workforce and address the COVID-19 pandemic. For example, many employers want to incentivize their employees to receive a COVID-19 vaccination. Employers contemplating such changes may want to consider the EEOC’s proposed and final ADA rules as well as the implications under ERISA, COBRA, ACA, HIPAA, GINA, the Code, and the FLSA.